The sales reps allegedly told the consumers there was an “urgent problem” or “something wrong” with their existing electricity supply.Source:Getty Images

A VICTORIAN energy retailer has been fined $20,400 by the consumer watchdog for allegedly engaging in misleading door-to-door sales conduct.

IPower Pty Ltd, trading as Simply Energy, was issued the infringement notices by the ACCC over two separate instances in 2014 in which sales representatives selling Simply Energy products visited the homes of two consumers in Victoria.

The sales reps allegedly told the consumers there was an “urgent problem” or “something wrong” with their existing supply, when this was not the case.

The ACCC says it had “reasonable grounds to believe that IPower made false or misleading representations about the standard or quality of goods in contravention of the Australian Consumer Law”.

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the ACL — the ACCC can issue an infringement notice where it has reasonable grounds to believe the law has been breached.

ACCC Chairman Rod Sims said the consumer watchdog would continue to take appropriate enforcement action against retailers who do not comply with their legal obligations.

“Consumers have a right to expect that door-to-door sales representatives will not make false or misleading representations, or otherwise engage in unlawful sales tactics,” he said.

While the big three energy retailers — AGL, EnergyAustralia and Origin — have stopped residential door-to-door sales altogether as a result of ACCC action and the Do Not Knock consumer campaign over the past 12 to 18 months, many smaller retailers have stepped in to fill the gap.

Simply Energy has been the subject of 25 complaints through the Do Not Knock website in the current financial year, a number of which have been referred to the ACCC.

It also received more than 1300 complaints to the Victorian Energy and Water Ombudsman between July and September last year — a disproportionately high number based on its market share.

The Consumer Action Law Centre says there has been a surge in demand for its Do Not Knock stickers.Source:Supplied

Simply Energy has just 6 per cent market share in electricity, but attracted 10.7 per cent of total complaints to the EWOV. Similarly, with 6.1 per cent market share in gas, it attracted 9.4 per cent of complaints.

“When we look at the complaints we receive through the Do Not Knock website, the number for Simply Energy is higher than for any other business,” said Gerard Brody, chief executive of the Consumer Action Law Centre. “It seems to us there are still a lot of problems in this sector.”

In a statement, a spokesperson for Simply Energy said: “Simply Energy takes its responsibilities regarding door-to-door sales very seriously. We have very strict processes and protocols in place governing the activities of our sales agents.

“We have conducted a thorough investigation of the incident raised by the ACCC. While we believe there are some questions about the alleged incident, Simply Energy accepts the ACCC decision.”

Anne Whitehouse, chief executive of industry self-regulatory body Energy Assured, said there were an estimated 1200 door-to-door sales agents currently operating in Australia, working for just a handful of energy retailers.

Those include Simply Energy, Lumo Energy, Red Energy, CovaU and Alinta Energy. AGL and Origin no longer use door-to-door agents for residential sales, but do for small business.

Ms Whitehouse said her organisation received an average of five complaints for every 10,000 homes visited, a figure that has remained relatively static for the past few years.

She defended the industry’s right to use door-to-door sales, as many smaller retailers do not have the marketing budget to reach consumers through other means. “It’s a very low-involvement product. For many smaller retailers this is the only way to gain market share,” she said.

The news comes after the Federal Court earlier this week ordered Origin Energy Limited and two of its subsidiaries to pay penalties totalling $325,000 for making false or misleading representations in relation to potential discounts.